Difference Between Form 16 and Form 16A

What is Form 16?

Form 16 is an Income Tax certificate furnished to salaried individuals by their respective employers. This document carries all necessary details that assist the employee in filing the tax returns. Form 16 is issued to an employee by their organization or company and is used as a source of proof of filing Income Tax returns of the employee. The Form consists various details of an employee such as salary components, TDS (Tax Deducted at source) by the organization or the employer, and tax paid by the Employer to the Income Tax Department. Every company should provide their employees with the Form 16 who fall under the tax brackets set up by the Finance Ministry of the Govt of India. If the employee doesn’t fall under the tax brackets set, then will not need to pay taxes neither will they need to have TDS.

What is Form 16A?

Form 16A is a TDS (Tax Deducted at Source) Certificate. However Form 16 is for only salary income, Form 16A is applicable for TDS on Income Other than Salary. Form16A shall be issued to the taxpayer when a bank deducts TDS on interest income from fixed deposits, for TDS deducted on assessee’s rent receipts, in fact, for TDS deducted on insurance commission, any other income received on which TDS has to be deducted. Form 16A also has details of name and address of deductor and deductee, Permanent Account Number and TAN details, challan details of TDS deposited. This form also contains the has details of income earned, and the TDS deducted and deposited on such income. Under the Income Tax Act, Tax Deducted at Source is liable to be deducted from all other payments if the payment expected to be made during the year is more than Rs. 30,000 unless exempted otherwise.

Both the forms are necessary and are required to help you file your return smoothly. You can also verify the income details and how much TDS has been deducted and at what rates.

Difference Between Form16 and Form16A

Let’s have a look at the differences between Form16 and Form 16A.

S.No

Criteria

Form 16

Form 16A

1.

About

Form 16 is a certificate under Sec 203 Income Tax for tax deducted at source from income chargeableunder the head of ‘salaries’.

Form 16A is a certificate under Sec 203 Income Tax for tax deduction at source for income other than salary.

2.

Eligibility

A salaried employee who earns a steady and regular income.

Individuals who are either self-employed people or a professional with document qualification degree.

3.

Applicable Towards

Interest on dividends, securities, and interest other than interest on securities, etc.

Income proof, details of the employer, PAN and TAN of the employer, PAN of the employee, acknowledgment of the amount of tax paid, Education Cess, Secondary Higher Education Cess, and surcharges.

Details of the employer Such as the Name, TAN, PAN Number details and particulars of the employees like Name and PAN number. Nature of payment, the amount paid and receipt number of TDS payment.

5.

Verification Mode

Form 16 can be verified online.

Form16A can be verified online.

What is PAN?

PAN (Permanent Account Number) is an identification code of Indians especially who pay income tax. It is a ten digit unique alphanumeric identifier issued by Indian Income Tax Dept under the supervision of the Central Board of Direct Taxes. PAN is issued to all administrative entities identifiable under Sec 139A of the Income Tax Act 1961, and it also serves as a significant proof of identification. The PAN is compulsory for a majority of financial transactions such as receiving taxable salary or professional fees, opening a bank account, sale or purchase of assets, etc. (especially high-value transactions) PAN is unique to each and has lifetime validity throughout India. Once issued, the PAN is not affected by a change of address. The primary purpose of the PAN is to bring a universal identification to all financial transactions. It can prevent tax evasion by keeping track of monetary transactions.

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